What if US defense and entitlement spending push the structural deficit durably higher?
A US defense and entitlement spending step-up pushes the structural deficit higher, reinforcing the Treasury term-premium repricing and crowding private credit.
how we built this number — every step
The class rate is measured from our dated, sourced event library (decade-normalized Poisson — the full table is public at base_rates.json). The variant’s share within its class is the analyst’s editorial call, published so you can audit it. A wider range means thinner precedent. Full recipe: methodology · scored at Reality Check.
The butterfly cascade
How this trigger trickles across markets, left → right — the root shock, its first‑order moves, then the ripple effects. Drag any node; tap a market for its real price history.
Resolution timeline — how this probability is moving
Our model's odds (gold) over time vs the crowd's (Polymarket, blue), from the past toward the 1–3 years horizon. Each dot is a real macro event that nudged the probability — green pushed it up, red pushed it down. Tap a dot for the source. The gold path is an illustrative reconstruction anchored to today's estimate — real dated events, not a live re-estimate history.
What it would mean
If this plays out, it is a risk-off shock. A US defense and entitlement spending step-up pushes the structural deficit higher, reinforcing the Treasury term-premium repricing and crowding private credit. The trigger decomposes into signed root‑shocks — Credit spreads ▲ · Defense spending ▲ · Dollar/reserve confidence ▼ · Real yields ▲ — which propagate through our causal graph to the markets below.
If it happens — the markets it would move
Biggest moves first. Projected moves are cascade-model priors; hist A–B% = what comparable past events actually did (measured abnormal returns), and model prior · unmeasured marks markets with no analogue backing yet. Tap any market for its price history.
| Market | Class | Projected move | |
|---|---|---|---|
| 1 | MicroStrategy MSTRon Hyperliquid 📈 chart | Equity | ▲ +1.2% hist -0.21–+2.04% · other way +25.41% (n=12) |
| 2 | 30y Treasury yield DGS30 📈 chart | Rate | ▲ +10bp hist +2.95–+7.98% · other way +7.7% (n=12) |
| 3 | 10y Treasury yield DGS10 📈 chart | Rate | ▲ +9bp hist +2.03–+6.8% · other way +6.1% (n=12) |
| 4 | Tech sector XLK 📈 chart | Equity | ▼ -0.9% hist -0.69–+0.17% · other way +0.42% (n=12) |
| 5 | Lockheed LMT 📈 chart | Equity | ▲ +0.9% hist +0.13–+0.97% · other way -2.86% (n=12) |
| 6 | Northrop NOC 📈 chart | Equity | ▲ +0.8% hist +0.11–+0.88% · other way -2.07% (n=12) |
| 7 | Nasdaq 100 NDXon Hyperliquid 📈 chart | Index | ▼ -0.7% hist -0.56–+0.0% · other way +0.4% (n=12) |
| 8 | Bitcoin BTCon Hyperliquid 📈 chart | Crypto | ▲ +0.7% hist -4.2–+2.34% · other way +6.5% (n=11) |
| 9 | RTX RTXon Hyperliquid 📈 chart | Equity | ▲ +0.7% hist -0.64–+0.59% · other way -3.05% (n=12) |
| 10 | Gold XAUon Hyperliquid 📈 chart | Commodity | ▲ +0.6% hist -0.01–+0.85% · other way -0.42% (n=12) |
| 11 | US dollar (DXY) DXYon Hyperliquid 📈 chart | FX | ▼ -0.6% hist -0.43–+0.39% · other way +1.14% (n=12) |
| 12 | S&P 500 SPXon Hyperliquid 📈 chart | Index | ▼ -0.5% hist -0.71–+0.03% · other way -0.7% (n=12) |
| 13 | EUR/USD EURUSDon Hyperliquid 📈 chart | FX | ▲ +0.5% hist -0.43–+0.55% · other way -1.36% (n=12) |
| 14 | Coinbase COINon Hyperliquid 📈 chart | Equity | ▲ +0.5% hist -4.24–+12.36% · other way +20.49% (n=11) |
Probable recommendation
Historical precedent — what analogous events actually did
Across 40 analogous events (overlap‑weighted), as abnormal returns — market beta stripped, so it's the event's own effect, not the market backdrop. Shown at 20 days (persistent) and 5 days (immediate); ↺ fades = the two horizons disagree. Confidence = consistency × sample × significance.
| Asset | History says | Abnormal (20d · 5d) | Hit | n | Confidence | vs cascade |
|---|---|---|---|---|---|---|
| COIN COIN | LONG | +11.2% · 5d +8.3% | 79% | 13 | 0.45 | ✓ matches cascade |
| High-yield credit HYG | SHORT | -0.7% · 5d -0.1% | 70% | 38 | 0.33 | ✓ matches cascade |
| AVGO AVGO | LONG | +3.9% · 5d -0.5% ↺ fades | 67% | 32 | 0.32 | ⚠ differs |
| MRVL MRVL | SHORT | -0.4% · 5d -2.9% | 70% | 40 | 0.31 | ✓ matches cascade |
| KRW KRW | SHORT | -1.2% · 5d -0.2% | 65% | 39 | 0.29 | ⚠ differs |
| HOOD HOOD | LONG | +7.4% · 5d +0.4% | 64% | 13 | 0.26 | ⚠ differs |
| SOL SOL | SHORT | -3.5% · 5d -7.0% | 68% | 13 | 0.22 | ⚠ differs |
| ETH ETH | SHORT | -6.2% · 5d -3.4% | 65% | 19 | 0.22 | ⚠ differs |
| AUD AUD | SHORT | -0.8% · 5d +0.1% ↺ fades | 62% | 39 | 0.21 | ⚠ differs |
| XLF XLF | SHORT | -0.7% · 5d -1.0% | 60% | 40 | 0.18 | ✓ matches cascade |
| US dollar DXY | LONG | +0.6% · 5d +0.2% | 60% | 40 | 0.17 | ⚠ differs |
| XHB XHB | SHORT | -1.4% · 5d -0.1% | 60% | 39 | 0.17 | ✓ matches cascade |
| TRY TRY | SHORT | -0.7% · 5d +1.1% ↺ fades | 60% | 39 | 0.16 | ⚠ differs |
| 10y yield DGS10 | LONG | +2bp · 5d +4bp | 59% | 40 | 0.15 | ✓ matches cascade |